It’s always been possible to claim tax relief for remote working expenses – including your electricity and heating bills – but only if you’re not working from home by choice. Due to the lockdown, there are now an unprecedented number of people eligible for this type of tax relief.
What can I claim for?
While working from home, you are likely to incur higher bills than you would if you spent all day in the workplace.
You can claim back on anything you need to buy to be able to work from home:
Home office furnishings: e.g. a chair, desk, or bookcase
Upgrades to your internet connection
Business phone calls
HMRC will not reimburse anything that you would have used anyway or anything that is also for personal use.
How much can I claim?
It’s based on what you’ve spent and the rate at which you pay tax.
If you’re using your own money for things you need to enable you to work from home, you can claim that money back from any tax you’ve paid. For example, if you spend £60 and pay a tax rate of 20% in that year, the tax relief you can claim is £12.
Am I eligible?
Unless your employer gives you all the money back or offers an alternative option - such as a laptop - which you’ve refused, you should be eligible.
Workers who do not pay income tax (i.e. haven’t earned £12,500 in the financial year) won’t benefit from this. If your employer says you can work in the office, and you’re able to but you refuse, you cannot claim tax relief, because it will be your choice to work from home.
Check the government website if you’re unsure of your eligibility.
How do I claim?
You can claim through your self-assessment form, but those who are not self-employed can simply fill out a P87 form – this can be done by post or online.
You must provide your employer’s name and PAYE reference (which can be found on your payslip or P60) and your job title. You’ll also need your national insurance number for postal P87s.
There are two boxes in the online form under the “Using your home as an office” section:
Amount paid by you – HMRC says that provided you’ve had increased costs, putting a total amount that’s equivalent to £6 per week for the period you’ve been working from home will mean you won’t need to show receipts.
Amount paid to you by your employer – if your employer hasn’t paid you a home working allowance or reimbursed your homeworking expenses, put £0.
If you claim through the postal form, you’ll need to add this section in yourself, under “other expenses”.
You can claim for it retroactively – either in a few months or when you’re back in your office – then you can make one claim for the whole time you spent at home. Those who have submitted their form online may get a response within a couple of weeks – depending on the pressure HMRC is under.
Instead of a direct refund, your tax code will likely adjust ensuring you pay less tax over the year.
Overall, taxpayers will be no worse-off for being forced to work from home – either your employer reimburses you, or the government will.
If you're looking for a qualified professional or a new role contact your nearest Reed office.